Sports car maker Porsche is considering a possible acquisition of German manufacturer Varta’s large-format lithium-ion electric battery business, whose share price soared on Friday following the announcement.
The two companies have signed a non-binding memorandum of understanding, which should lead to the separation of the subsidiary into an independent entity, so that Porsche can access the capital of V4Drive “through a majority stake,” Varta announced on Thursday evening. The amount of the planned transaction was not specified.
The share price of Varta, known for its consumer batteries but also making car batteries and renewable energy storage systems, gained almost 20% on the Frankfurt Stock Exchange on Friday. For the heavily indebted company in the process of restructuring, Porsche’s investment would have a “liberating” financial effect, according to analyst Jürgen Molnar of Robomarket. Varta shares, currently trading at just over 10 euros, were worth almost 200 at the beginning of 2021.
A factory in Baden-Württemberg
For Porsche, Volkswagen’s sports subsidiary, which is in the midst of electrification, this investment could reduce its dependence on Asian battery suppliers, such as China’s CATL. In 2021, Porsche launched a project to develop its own batteries, through its subsidiary Cellforce, with the aim of mass-producing high-performance batteries in 2024.
However, the location for the plant, which was originally to be located in Baden-Württemberg (southwest), has not yet been decided. The German press has mentioned a possible location in the USA, motivated by American subsidies under the Inflation Reduction Act (IRA) scheme.
Another option would be the supply of batteries by Volkswagen’s subsidiary PowerCo, with production due to start in 2025. “No decision has yet been made,” a Porsche spokesman told AFP on Friday. Like other manufacturers, Porsche faces the threat of Chinese brands that are at the forefront of electric vehicles.
In 2023, the brand only sold around 40,629 units of the Taycan, its only 100% electric model on the market, representing a 12.7% share of its total sales. It is still a long way from its goal of having more than 80% of its deliveries be 100% electric models by 2030.
Source: BFM TV
